Miliband unveils ‘cost-of-living contract’

A Labour supporter listening to Mr Milibands speech pins his colours to the mast. Picture: Getty

He said his government would also legislate to make three-year tenancies the norm to provide security for families, and warned that housing costs were “one of the biggest causes of the cost-of-living crisis”.

Mr Miliband made the pledge as he launched the party’s campaign for the European Parliamentary elections on 22 May.

The measures would apply south of the Border only, as powers over housing and rent controls are devolved.

However, Scottish Labour said it would pursue a similar policy if it wins the next Holyrood election in 2016. Johann Lamont will launch the party’s Scottish election campaign in Glasgow today.

Mr Miliband called for longer, more secure tenancies and rental agency charges of up to £500 to be axed.

Speaking to a London audience, he told of a “cost-of-living  crisis that Britain hasn’t seen for as long as anyone can remember”, and which would be at the heart of the four-week campaign. He said: “The vital link between the wealth of the country as a whole and ordinary family finances has been broken.

“People are working harder, for longer, for less, with a few at the top getting the big rewards – insecurity at work for the many.”

Mr Miliband said a whole generation has been unable to get on the housing ladder due to spiralling prices and yet the needs of long-term tenants had too often been neglected. Letting fees – which the party said averaged £350 – would be abolished in a package of reforms.

Under proposals to prevent landlords forcing people out by hiking rents, property owners would be forced by law to keep rises below a set level. Landlords would need to serve two months’ notice to get rid of tenants with “good reason”, such as rent arrears, anti-social behaviour or because they needed the property to live in or to  refurbish.

However, British Property Federation director Ian Fletcher said: “Good landlords will be getting a perverse message that if you are providing a premium product, the most you can expect is the ‘average’, whilst bad landlords with sub-standard accommodation can find another justification for charging over the odds.” He added that there were already mechanisms in place to deal with “dodgy” rents.

The Royal Institution of Chartered Surveyors (Rics) also insisted that a cap on rents would not resolve the housing crisis.

Jeremy Blackburn, Rics head of policy and parliamentary affairs, said: “We are not developing proposals on rent benchmarks for the private rented sector, and we do not recommend that a government introduce a ceiling on rent increases.

“Labour is right to talk about ‘generation rent’, but arbitrary caps are not a solution.”

Conservative chairman Grant Shapps claimed Labour had  itself ruled out state-controlled rent recently. He said: “Just four months ago, their housing spokesman was saying that rent controls wouldn’t work.”